Financial ratio analysis is conducted by different groups of analysts. What is the primary emphasis of each group?

Select one:

a. Equity investors are interested primarily in profitability.

b. Managers focus only on liquidity and look most carefully at the current ratio.

c. Long-term creditors examine the ratios to get information on the riskiness of equity commitments.

d. Equity investors do not care about the riskiness of equity commitments or the liquidity ratios.

e. Short-Term creditors emphasize on the debt, TIE and ROE ratios.

Which of the following would indicate an improvement in a companys financial position, holding other things constant?

Select one:

a. The MV/BV ratio increases.

b. The ROA decreases.

c. The debt ratio increases.

d. The inventory and total assets turnover ratios both decline.

e. The DSO decreases.

Which of the following statements is most correct?

Select one:

a. If an investment pays 10 percent interest compounded annually, its effective rate will be greater than 10 percent.

b. A 15-year mortgage will have larger monthly payments than a 30-year mortgage of the same amount and same interest rate.

c. A 5-year $100 annuity due will have a smaller present value than a 5-year $100 ordinary annuity.

d. An investment's periodic interest rate will always be equal to or greater than its nominal interest rate.

e. An investment's nominal interest rate will always be equal to or greater than its effective annual rate.